Daily Archives: September 15, 2011

The president’s Green Jobs loan guarantee program, which we’re hearing a lot about, thanks to the Solyndra fiasco, does not appear to be a complete bust. In all fairness, it has to be said that this program has been instrumental in directly creating jobs. Indeed, the Washington Postreports that, after having spent $17.2 billion of the original $38.6 billion appropriated for the green jobs program, the Administration can now claim the creation of 3,545 permanent new jobs as a direct result. That’s 3,545 of our fellow Americans who now have gainful employment, thanks to the Obama Administration’s Green Jobs program. I’m sure they, and their families, are grateful.

Of course, if you do the math, that comes out to a cost of $4,851,904.09 per job. That seems…inefficient. I’m pretty sure that if the government gave me $4.8 million, I could at least double that rate of job creation.

At this rate, once the entire $36.8 billion is spent, we may employ 7,000 people via the Green Jobs program. Or to put it in other terms, 4,000 fewer people than the increase in those who claimed unemployment compensation for the first time this past week.

The plan, one supposes, was to play some politics with a speech and put the GOP on the defensive. Then, submit the job’s package and finally get what the President has been after for three years. A tax increase on the rich. In fact, as it turns out, that is the entire funding mechanism for his $400 billion spending spree – to be collected later, of course. No reason to change the modus operandi of this administration and actually pay for a spending program now with cuts in other areas.

But it appears his plan hit an unexpected problem. Instead of being able to lay his blame at the doorstep of the Republican House and point at them on the campaign trail as the people who’ve caused all this misery and turmoil (yeah, I know, I’m just thinking about how he’d present it … and I’m being a bit sarcastic to boot), he’ll have to include his own party in the mix. Seems they’re no more happy about the proposal than the Republicans:

President Obama anticipated Republican resistance to his jobs program, but he is now meeting increasing pushback from his own party. Many Congressional Democrats, smarting from the fallout over the 2009 stimulus bill, say there is little chance they will be able to support the bill as a single entity, citing an array of elements they cannot abide. ‘I think the American people are very skeptical of big pieces of legislation,’ Senator Bob Casey, a Democrat from Pennsylvania, said in an interview Wednesday, joining a growing chorus of Democrats who prefer an à la carte version of the bill despite White House resistance to that approach. ‘For that reason alone I think we should break it up.’”

Harry Truman he ain’t. So there goes the claim from Obama that the Republicans are nasty old obstructionists who are only interested in protecting the “rich”(all those “rich” folks who make $200,000 to $250,000 a year. Obama has decided that’s enough). He’ll now have to include Democrats:

Republicans have focused their attack on the tax increases that would help pay for the spending components of the bill. But Democrats, as is their wont, are divided over their objections, which stem from Mr. Obama’s sinking popularity in polls, parochial concerns and the party’s chronic inability to unite around a legislative initiative, even in the face of Republican opposition. Some are unhappy about the specific types of companies, particularly the oil industry, that would lose tax benefits. . . . A small but vocal group dislikes the payroll tax cuts for employees and small businesses. . . . There are also Democrats, some of them senators up for election in 2012, who oppose the bill simply for its mental connection to the stimulus bill, which laid at least part of the foundation for the Republican takeover of the House in 2010.”

It’s that bad taste in their mouth that just won’t go away and they’re not at all inclined to refresh it. After all, they have an election to wage next year and things aren’t looking so hot right now. Nails, coffin, some assembly required.

It is also telling that the Presidential ploy is so obvious while also being so out of step with the political reality of the situation. Is Obama playing X-box at night instead of keeping abreast of the political situation in the country? Or does he really think everyone else is so stupid they just won’t pick up on these rather amateurish ploys of his?

Speaking to NBC’s Chuck Todd on MSNBC this morning, Joe Scarborough observed, “Their problem is though of course, Chuck, this morning, the Democrats are the ones that are in open revolt . . . .” Todd replied, “That’s right. It’s the Democrats.”

It must be true, both the New York Times and the Washington Post have stories on it today. The New York Times:

In the emerging post-Qaddafi Libya, the most influential politician may well be Ali Sallabi, who has no formal title but commands broad respect as an Islamic scholar and populist orator who was instrumental in leading the mass uprising.

The most powerful military leader is now Abdel Hakim Belhaj, the former leader of a hard-line group once believed to be aligned with Al Qaeda.

Nice. The Times goes on:

The growing influence of Islamists in Libya raises hard questions about the ultimate character of the government and society that will rise in place of Col. Muammar el-Qaddafi’s autocracy. The United States and Libya’s new leaders say the Islamists, a well-organized group in a mostly moderate country, are sending signals that they are dedicated to democratic pluralism. They say there is no reason to doubt the Islamists’ sincerity.

But as in Egypt and Tunisia, the latest upheaval of the Arab Spring deposed a dictator who had suppressed hard-core Islamists, and there are some worrisome signs about what kind of government will follow. It is far from clear where Libya will end up on a spectrum of possibilities that range from the Turkish model of democratic pluralism to the muddle of Egypt to, in the worst case, the theocracy of Shiite Iran or Sunni models like the Taliban or even Al Qaeda.

And which do you suppose, given no traditional institutions or experience with “democratic pluralism” in Libya, is most likely to emerge?

Oh, gee, I don’t know?

Who are the best organized and the most ruthless?

Islamist militias in Libya receive weapons and financing directly from foreign benefactors like Qatar; a Muslim Brotherhood figure, Abel al-Rajazk Abu Hajar, leads the Tripoli Municipal Governing Council, where Islamists are reportedly in the majority; in eastern Libya, there has been no resolution of the assassination in July of the leader of the rebel military, Gen. Abdul Fattah Younes, suspected by some to be the work of Islamists.

Yet I’m sure this will all come as a complete surprise to the politicians.

As Libya’s leader, Moammar Gaddafi regarded Islamists as the greatest threat to his authority, and he ordered thousands of them detained, tortured and, in some cases, killed. The lucky ones fled the country in droves. But with Gaddafi now in hiding, Islamists are vying to have a say in a new Libya, which they say should have a system based on Islamic law.

Although it went largely unnoticed during the uprising that toppled Gaddafi last month, Islamists were at the heart of the fight, many as rebel commanders. Now some are clashing with secularists within the rebels’ Transitional National Council, prompting worries among some liberals that the Islamists — who still command the bulk of fighters and weapons — could use their strength to assert an even more dominant role.

Unnoticed by whom? Oh, those in charge of our State Department, apparently. Organization and ruthlessness? Still no guess?

“Secularists don’t like Islamists,” said Ismail Sallabi, an influential cleric who is among nine leaders commanding rebel forces in eastern Libya. Before the revolution, he said, he had never held a weapon. “They want to use Islamists in the fighting stage and then take control.”

And that’s been successful where so far?

Meanwhile, in the category of “best organized”, we have a winner:

Libya is a conservative Muslim nation, and its future government will probably reflect that; the governments of Egypt and Iraq are among Arab states that base their governance on Islamic law. Although Gaddafi’s government tolerated little in the way of activism, Libya’s Islamist groups appear to have emerged from his reign as the best-organized among political groups, and secularists among the country’s new leaders appear determined not to alienate them.

In the old “what did they know and when did they know it” game concerning Solyndra, the failed solar company backed by half a billion dollars of federally guaranteed loans, it appears the administration was warned repeatedly that it would fail.

Even after Obama took office on Jan. 20, 2009, analysts in the Energy Department and in the Office of Management and Budget were repeatedly questioning the wisdom of the loan. In one exchange, an Energy official wrote of "a major outstanding issue" — namely, that Solyndra’s numbers showed it would run out of cash in September 2011.

There was also concern about the high-risk nature of the project. Internally, the Office of Management and Budget wrote that "the risk rating for the project sponsor [Solyndra] … seems high." Outside analysts had warned for months that the company might not be a sound investment.

And the reason?

Fairly simple, really:

"It’s very difficult to perceive a company with a model that says, well, I can build something for six dollars and sell it for three dollars," Lynch said. "Those numbers don’t generally work. You don’t want to lose three dollars for every unit you make."

But apparently not enough to warn off what was something that the administration badly wanted to back – “green” jobs. The problem of course is they weren’t viable green jobs. The company failed Econ 101 analysis, yet that didn’t stop our central planners from pushing ahead with the loan guarantees.

And all the info to determine this wasn’t a good risk was there:

In 2008, Solyndra, then just three years old, pushed ahead with its application for government backing to build a new plant to produce its unique solar panels. An outside rating agency, Fitch, gave Solyndra a B+ credit rating that August. Two months earlier, in June 2008, Dun & Bradstreet issued a credit appraisal of the company. Its assessment: "Fair."

Those are not top-of-the-line scores, Fitch Ratings spokeswoman Cindy Stoller told the Center for Public Integrity’s iWatch News, which has been investigating the deal in partnership with ABC News since March. She could not discuss the Solyndra review specifically, but said of a B+ rating: "It’s a non-investment grade rating." She provided a company ratings definition, showing that B+ falls between a "highly speculative" B and "speculative" BB.

Anyone with a 5th grade education would know enough to go “not where we should sink our money”. But sink it they did.

What do we get back from the administration when questioned about all of this?

Asked about those ratings, and how significantly the department viewed the risk, Energy officials said Monday the department conducted "extensive due diligence" on the application, which included consideration of the Fitch rating.

"We believed the rating, which is used to inform our analysis of potential risks associated with the loan, was appropriate for the size, scale and innovative nature of the project and was consistent with the ratings of other innovative start-up companies," said Damien LaVera, an Energy Department spokesman.

"The Department conducted exhaustive reviews of Solyndra’s technology and business model prior to approving their loan guarantee application," LaVera said. "Sophisticated, professional private investors, who put more than $1 billion of their own money behind Solyndra, came to the same conclusion as the Department: that Solyndra was an extremely promising company with innovative technology and a very good investment."

Well, if that’s the case, then the analysts at the DoE are utterly incompetent. My guess is they came up with the analysis their bosses wanted, not that which actually told the truth about the situation.

Again, instead of letting the market do its job, the administration continued to ignore the warning signs and intrude, backing a company that was bound to fail and in the end, throwing a half billion taxpayer dollars down the drain.

And there’s this:

The White House has argued that any effort to finance start-up businesses in a relatively new field like solar energy is bound to include risky ventures that could fail. They reject the notion being pushed by Republicans that Solyndra was chosen for political reasons. One of the largest private investors in the deal, Oklahoma billionaire George Kaiser, was also a prominent fundraiser for Obama’s 2008 presidential campaign.

And, Solyndra’s CEO was a large contributor as well.

However, the big concern?

"This deal is NOT ready for prime time," one White House budget analyst wrote in a March 10, 2009 email, nine days before the administration formally announced the loan.

"If you guys think this is a bad idea, I need to unwind the W[est] W[ing] QUICKLY," wrote Ronald A. Klain, who was chief of staff to Vice President Joe Biden, in another email sent March 7, 2009. The "West Wing" is the portion of the White House complex that holds the offices of the president and his top staffers.

Yup, protect the White House. And they didn’t even have the wits to back out when they could have, instead doubling down in the face of horrific numbers. Sound familiar?

Today’s economic statistical releases—and there are a number of them, none of them particularly good:

Consumer inflation remains a bit heated with the headline CPI increase at 0.4% for the past month, while the core rate—less food and energy—rose by 0.2%. On a year-over-year basis, inflation rose to 3.8%. worries about Stagflation are not eased by this report.

Business conditions in the New York manufacturing region continue to contract. The Empire State Manufacturing Index fell to -8.82 from last month’s –7.72.

Jobless claims jumped 11,000 in the September 10 week to an unexpectedly high 428,000. The four-week average rose 1,000 to 3.741 million.

Manufacturing slowed significantly in August, as industrial production rose only 0.2%, compared to last month’s 0.9%. Capacity Utilization also fell slightly, to 77.4%.

The nation’s current account deficit narrowed slightly in the second quarter to $118.0 billion.

The Bloomberg Consumer Comfort Index in the September 11 period was -49.3, near this year’s low of -49.4.

The Philadelphia Fed Survey indicates that business conditions in the Mid-Atlantic region continue to contract, with the General Business Conditions Index at –17.5.

A majority of Americans don’t believe President Barack Obama’s $447 billion jobs plan will help lower the unemployment rate, skepticism he must overcome as he presses Congress for action and positions himself for re- election.

The downbeat assessment of the American Jobs Act reflects a growing and broad sense of dissatisfaction with the president. Americans disapprove of his handling of the economy by 62 percent to 33 percent, a Bloomberg National Poll conducted Sept. 9-12 shows. The disapproval number represents a nine point increase from six months ago.

One reason that the American people don’t believe Obama’s plan will work is because it is simply a rerun of the $800 billion plus stimulus which didn’t work. Additionally, it has since become clear that he is attempting to get his tax increases past the Republican party by making them the funding mechanism for this. Even Democrats are complaining about that (you don’t raise taxes in a recession – Econ 101).

Harry Truman he ain’t.

And again, electorally, here’s the bad news for Obama:

The president’s job approval rating also stands at the lowest of his presidency — 45 percent. That rating is driven down in part by a majority of independents, 53 percent, who disapprove of his performance.

If it stays like that, he’ll be introducing himself as the former president in 2013. In Obama campaign headquarters, aka the White House, these numbers probably have sirens wailing, lights flashing and grown men crying:

The poll hands Obama new lows in each of the categories that measures his performance on the economy: only 36 percent of respondents approve of his efforts to create jobs, 30 percent approve of how he’s tackled the budget deficit and 39 percent approve of his handling of health care.

So on the issues that most concern American voters, he’s not doing well at all.

But back to his latest attempt to push his tax and spend package through:

By a margin of 51 percent to 40 percent, Americans doubt the package of tax cuts and spending proposals intended to jumpstart job creation that Obama submitted to Congress this week will bring down the 9.1 percent jobless rate. That sentiment undermines one of the core arguments the president is making on the job act’s behalf in a nationwide campaign to build public support.

Compounding Obama’s challenge is that 56 percent of independents, whom the president won in 2008 and will need to win in 2012, are skeptical it will work.

I would guess its mostly because they recognize the package for what it is, and it is certainly not “new”. It is just another, in a long line of attempts by this administration, to push the same old tax increases through Congress. And despite what Obama claims those tax increases are not something the GOP has agreed to in the past – or ever. He gave them a substantial and supportable reason to oppose the package as Obama has presented it.

Finally the big picture as it stands today:

Forty-six percent of independents say they definitely won’t vote to re-elect the president, compared to 21 percent who definitely will support him. In 2008, Obama was backed by 52 percent of independent voters, compared to 44 percent who backed Republican nominee John McCain, an Arizona senator, according to exit polls.

And enthusiasm for Obama? Waning:

Of the respondents who said they’ve supported Obama at one point since he launched his presidential campaign in 2007, fewer than half say they still support him as fervently. Thirty- seven percent say their support has waned and 19 percent say he lost their backing because they’ve grown disappointed or angry with his leadership.

Almost a third of Democrats and Democratic-leaning respondents say they’d like to see Obama face a primary challenge.

Yeah, grim. He’s been found to be an empty suit by many of his own core supporters. Plus he has to run on his record for a change.